Pediatric Bipolar Disorder (PBD) is a serious public health concern associated with mood instability, high suicide rates, substance abuse, academic failure and poor interpersonal relationships. The illness is also associated with significant affect dysregulation and cognitive dysfunction. Onset of this bipolar diathesis early in life may adversely impact the development of brain structures affecting the regulation of mood and cognition known to mature during childhood and adolescence. For that reason, it is particularly important to understand pathophysiological processes affecting the affective and cognitive neural systems during development. Our preliminary findings in the PBD patients, relative to healthy controls, suggest reduced top down regulation of affective brain systems, indicated by decreased activation of dorsolateral and ventrolateral prefrontal cortex and increased activation of amygdala and peri-amygdaloid structures during emotional processing. Therefore, our first and central aim of the current study is to clarify the systems-level pathophysiology during manic states to better identify the interlinked affective and cognitive neural circuitry function. Our secondary aim is to examine the affective and cognitive circuitry function following symptomatic recovery. We plan to use a longitudinal study design, examining brain function in 100 narrowly defined medication naove PBD patients aged 13-16 years at two time points: (1) At baseline in manic state, and (2) After 8 weeks of treatment with the prototypic mood stabilizer lithium carbonate in medicated euthymic responders and non-responders. Additionally, at baseline and at the end of 8 weeks, we will also characterize the brain function in 50 typically developing IQ and demographically matched healthy youths who will be compared with the PBD patients. We will use innovative neurocognitive and fMRI paradigms to probe the affective and cognitive circuitry function at each time point. This work will help to establish a model that characterizes the functional pathophysiology of PBD and provides reliable and objective understanding of the neural systems in illness and on recovery. This model will serve as a prototype in providing future opportunities for preventive efforts by facilitating early identification, moving a step closer to safer, more effective and neurobiologically informed early interventions for youths that would potentially reverse the pathophysiology in PBD patients.